Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sydney Ltd acquired a 71% interest in Brisbane Ltd on 1 July 2014 for $918,000 On the same date, the balance of shareholders' equity of

image text in transcribed
image text in transcribed
image text in transcribed
Sydney Ltd acquired a 71% interest in Brisbane Ltd on 1 July 2014 for $918,000 On the same date, the balance of shareholders' equity of Brisbane Ltd comprised: Share capital $250,000 General reserve $107,000 Retained earnings $143,000 $500,000 All assets are recorded at their fair values except for an item of plant, which had a fair value of $445,000 and a carrying amount of $165,000 (original cost $555,000). The remaining useful life of the plant at the date of acquisition is 12 years. The fair value of the NCI in Brisbane Ltd on 1 July 2014 was $474,000. At 30 June 2016 & 2017 the equity balances of Brisbane Ltd are: 30/6/16 30/6/17 share capital $250,000 $250,000 General reserve $162,000 $179,000 Retained earnings $180,000 $194,000 Additional information: 1. Brisbane Ltd recorded a profit after tax of $36,000 for the year ended 30 June 2017 and paid a dividend of $8,000 on 1 January 2017 2. On 1 June 2016, Brisbane Ltd sold inventory to Sydney Ltd for $120,000, at a profit before tax of $50,000. The entire inventory is unsold at 30 June 2016. The inventory is sold to external parties by Sydney Ltd on 2. On 1 June 2016, Brisbane Ltd sold inventory to Sydney Ltd for $120,000, at a profit before tax of $50,000 The entire inventory is unsold at 30 June 2016. The inventory is sold to external parties by Sydney Ltd on 15 June 2017 The journal entries to record for Sydney Group as well as NCI at 30 June 2017 are as follows: Share capital General reserve Retained earnings BCVR Goodwill Investment in Brisbane $918,000 Share capital General reserve Retained earnings BCVR NCI General Reserve @@@ Retained Earnings NICI XXX BCVR NCI General Reserve @@@ Retained Earnings ### NCI XXX Please note that increase of prior period equities renders increase of NCL NCI account is credit if its bald increases Calculate and enter the amount of xxx is the answer block below: Answer: Sydney Ltd acquired a 71% interest in Brisbane Ltd on 1 July 2014 for $918,000 On the same date, the balance of shareholders' equity of Brisbane Ltd comprised: Share capital $250,000 General reserve $107,000 Retained earnings $143,000 $500,000 All assets are recorded at their fair values except for an item of plant, which had a fair value of $445,000 and a carrying amount of $165,000 (original cost $555,000). The remaining useful life of the plant at the date of acquisition is 12 years. The fair value of the NCI in Brisbane Ltd on 1 July 2014 was $474,000. At 30 June 2016 & 2017 the equity balances of Brisbane Ltd are: 30/6/16 30/6/17 share capital $250,000 $250,000 General reserve $162,000 $179,000 Retained earnings $180,000 $194,000 Additional information: 1. Brisbane Ltd recorded a profit after tax of $36,000 for the year ended 30 June 2017 and paid a dividend of $8,000 on 1 January 2017 2. On 1 June 2016, Brisbane Ltd sold inventory to Sydney Ltd for $120,000, at a profit before tax of $50,000. The entire inventory is unsold at 30 June 2016. The inventory is sold to external parties by Sydney Ltd on 2. On 1 June 2016, Brisbane Ltd sold inventory to Sydney Ltd for $120,000, at a profit before tax of $50,000 The entire inventory is unsold at 30 June 2016. The inventory is sold to external parties by Sydney Ltd on 15 June 2017 The journal entries to record for Sydney Group as well as NCI at 30 June 2017 are as follows: Share capital General reserve Retained earnings BCVR Goodwill Investment in Brisbane $918,000 Share capital General reserve Retained earnings BCVR NCI General Reserve @@@ Retained Earnings NICI XXX BCVR NCI General Reserve @@@ Retained Earnings ### NCI XXX Please note that increase of prior period equities renders increase of NCL NCI account is credit if its bald increases Calculate and enter the amount of xxx is the answer block below

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael Chris Knapp

9th International Edition

1133187900, 978-1133187905

More Books

Students also viewed these Accounting questions